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Why ICU Medical Shares Soared

Is this medical device maker looking to put a "for sale" sign in the front yard?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ICU Medical(NASDAQ:ICUI) -- a medical device maker in the fields of infusion therapy, oncology, and critical care -- soared as much as 17% on a report that the company could be exploring a sale.

So what: According to a Bloomberg News report that cites people familiar with the matter, ICU Medical has employed JPMorgan Chase to help it explore a sale that could yield a buy price of greater than $1 billion. As you might expect, neither ICU Medical nor JPMorgan Chase could be reached for comment.

Now what: Almost two years ago to the day that I included ICU Medical as one of my 10 small caps to rule them all because of its history of consistent growth, the opportunity that an aging population would present in terms of future growth, its large cash pile, and the potential that it may attract a buyer. Thus far that prognostication has been spot on with the share price having doubled and rumors swirling that it may indeed be looking to be purchased. This is a win-win for shareholders either way, because they either get the immediate pop of a buyout, or -- as I predicted -- ICU will continue higher over the long run as an aging population requires greater medical device usage.

Craving more input? Start by adding ICU Medical to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Author

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and investment planning. You'll often find him writing about Obamacare, marijuana, drug and device development, Social Security, taxes, retirement issues and general macroeconomic topics of interest. Follow @TMFUltraLong